As the situation in the Middle East continues to evolve, most everyday investors and savers are, of course, edgy. Sure, the market roared back. And Iran and Israel have agreed to a ceasefire, President Trump announced Monday on Truth Social.
But that doesn’t mean everyday folks, especially those approaching retirement, aren’t unnerved. There is a feeling that we are always waiting for the other shoe to drop.
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Are things any different now compared with other market turbulence? Should we simply stay the course as we have always been told during volatility? Or is this moment somehow different, demanding a deeper review of our portfolios?
To get a sense of all of that, I asked several personal financial experts for their best advice on how people should manage their money right now.
The basic message: Don’t run scared, keep a long-view perspective, have some cash on hand for comfort to ride it out, and remember to review your accounts periodically to make sure they still line up with your time horizon, risk tolerance, and your financial goals.
One thing everyone agreed on: Market timing is a fool’s game. So don’t dream that you can duck out when markets swoon and sidle back in when the sun comes out again. There’s a small window to get back in and hit the updraft correctly.
That said, here’s what our experts, and I, had to say:
“This has been a wild decade so far,” Collins told Yahoo Finance. “We’re halfway through… and we’ve gone through a pandemic and meme stocks and 9% inflation and interest rates going from zero to 5% in record time. Then we had these tariffs, and now what’s going on in the Middle East, and yet the average annual return for S&P 500 (from January 2020 to May 2025) has been nearly 13%. That’s incredible with all of that turmoil.”
Rescue workers and Israeli soldiers work at the site of a direct missile strike launched from Iran in Tel Aviv, Israel, on Sunday, June 22. (AP Photo/Oded Balilty) ·ASSOCIATED PRESS
For now, the Middle East situation doesn’t feel different when it comes to our long view on staying invested, he said. But short of a major conflict, his advice doesn’t change.
If you’re nearing retirement, of course, or in retirement, you should already be shifting to more conservative investing, and that means a larger allocation to bonds, he said. “But you never want to go below 50% in stocks because you need at least 50% in stocks as the growth engine that keeps your portfolio healthy over the years and decades.”
Next up: Diane Harris, deputy editor of “Kiplinger” and former editor in chief of “Money Magazine.”
She has a slightly different take.
“This situation has the potential to be substantively different,” Harris told Yahoo Finance. “It’s different from tariffs. It’s different from other bumps in the road.”
That said, you can’t control it. “All we can do as savers and investors and consumers is to control what we can control. And we can’t control the economy. We can’t control whether or not there’s a war. We can’t control on-again, off-again tariffs. But we can control a response in what we’re doing.”
It’s key to understand that what happens on any single day, or week or month, or even a year over the course of a career and through your retirement, which you’re talking about 20-, 30-, 40-year time horizons, is not really going to make a difference, Harris said.
“What feels like you’re headed off a cliff will feel like a speed bump when you look back on it,” she added. “Keep in mind that the history of stock prices is that the movement comes in short, sharp spurts upwards within days of big declines.”
Doing nothing doesn’t feel good when you’re feeling stressed about investments tanking in a potential market decline.
One solution is to hang on to cash reserves that can provide stability and flexibility. “When there’s chaos around you, identify one move, one thing that you can do to help and that makes you feel more in control,” Harris said.
For Harris, and I wholeheartedly agree, the one move to make is to load up on cash. “In case there’s a recession up the road, or you face a layoff, you’ll never be ill served by having more cash on hand,” she said. “When you build up your cash reserves, suddenly you’ve taken control of a situation that feels out of control for you.”
It doesn’t really differ by generation. Whether you’re younger or older, you want to try to stay the course as long as the course that you are on is right, and as long as you’re not a hundred percent in stocks or a hundred percent in cash, according to Harris. “The goal is to have a balanced portfolio, especially for your stage of life,” she said.
Harris is spot on. The aim is to maintain a portfolio that’s properly allocated and diversified based on your investment objectives. Financial advisers generally suggest rebalancing (adjusting your mix of stocks and bonds) whenever your portfolio gets more than 7% to 10% away from your original asset allocation, which was built to match your time horizon, risk tolerance, and financial goals.
To roughly determine what percentage of your portfolio should be in stocks, subtract your age from 110. So, a 60-year-old would have 50% in stocks and the rest in bonds and cash.
“If you’re going to retire within the next five years, or you have recently retired, then stock market drops can have a really big impact on your long-term financial security, your nest egg,” Harris said. “You want to be cautious. If you’re withdrawing money, you may want to withdraw a little bit less. You do a little tinkering around the edges to be safe.”
Christine Benz, the director of personal finance and retirement planning for Morningstar, is the author of “How to Retire: 20 Lessons for a Happy, Successful, and Wealthy Retirement.”
“For investors worried about the turmoil who still have a long runway to retirement — under age 50 or so — their portfolios should be predominantly in stocks,” Benz said. “However, it’s smart to revisit US/non-US exposure. Non-US stocks have dramatically outperformed US so far this year, but non-US stock prices are still relatively inexpensive, and there have been long stretches when non-US stocks have performed better than US.”
Try a global stock index like the Vanguard Total World Index. It currently owns US and non-US companies in proportion to their market values, and it’s 65% US/35% non-US. That makes it a decent benchmark for people trying to decide how much to stake overseas.
President Donald Trump delivers an address to the nation at the White House in Washington, D.C., June 21, following US strikes on Iran’s nuclear facilities. REUTERS/Carlos Barria/Pool/File Photo ·Reuters / Reuters
For those over 50 and getting closer to retirement, it makes sense to start taking some risk out of the portfolio, according to Benz.
“Stocks should still consume a heavy share of their portfolios (and it’s worth taking a look at US/non-US exposure at this life stage too). But as you get closer to spending from your portfolio, steering some money toward bonds or bond funds/ETFs is a good strategy. High-quality bonds like Treasurys have a good track record of holding their ground, or even gaining value in stock-market downdrafts.”
The beauty of that strategy is that if stocks go down — and stay down for a sustained period, and you need to pull cash from your portfolio because you’re retired — you could take it from the appreciated assets and leave the stocks alone, Benz said.
If someone is closing in on or in retirement, Benz recommends holding a buffer of cash and bonds amounting to seven to 10 years’ worth of anticipated cash-flow needs (above and beyond what they’d receive from Social Security or a pension).
The good news is that yields are now decent on bonds and cash instruments, so you get paid while you wait, she said. “Inflation is a risk factor for this part of the portfolio, though, which is why investors shouldn’t overdo their exposure to ‘safe’ assets and why they should consider embedding direct inflation protection with I-bonds and Treasury Inflation-Protected Securities.”
That’s solid advice.
When you’re close to stepping away from a steady paycheck, or already retired, you should have at least five years’ worth of living expenses in a combination of high-yielding savings accounts, CDs, money market funds, and high-quality bonds.
If there are still several years until retirement, and you’re an individual that might be doing the bulk of your retirement savings in a vehicle through your employer like a 401(k), continue to do those systematic investments while the market is down, because you are going to be buying shares more cheaply before the market rebounds.
If you’re investing money automatically in your employer-sponsored retirement plan or an IRA, you’re investing when the market is ripping and when it’s tanking, and that means the return on your investments evens out over the long haul.
If you’re like many retirement savers and invest in a target-date retirement fund, your account is automatically adjusting for market gyrations.
With a target-date retirement fund, you pick the year you’d like to retire and buy a mutual fund with that year in its name (like Target 2044). The fund manager then splits up your investment between stocks and bonds, typically both US and international, changing that balance to a more conservative blend as the target date approaches.
It’s a conservative approach — and about the best you can do even as the world goes crazy on us.
